In the growth of mobile adoption in the online financial space, trading your brokerage account from an online platform still has plenty of benefits. Some of these benefits include a wide variety of order types for options traders, comprehensive charting tools for day traders, the ability to create bond ladders, and educational experiences that help make you more prepared to invest and trade. The winners in this category had impressive online trading portals that provide you with an abundance of features to help you succeed.
Best Online Trading Platform
Our list of the top five trading platforms:
- TD Ameritrade
- Charles Schwab
- Fidelity Investments
- Merrill Edge
- Account Minimum: $0
- Fees: Free stock, ETF, and per-leg options trading commissions in the U.S., as of October 3rd, 2019. $0.65 per options contract.
Streaming news and home-grown video is built into the TD Ameritrade website, along with a wealth of education and product offerings. You can read the chatter about your holdings and watch lists using Social Signals, which pulls information from Twitter and organizes tweets for you. You can customize your web experience using TD Ameritrade’s Dock tool, which lets you include information from other websites such as Yahoo! Finance.
Alerts let you define what kinds of reports you want
Free independent research from a wide variety of sources
A trade ticket is displayed at the bottom of every screen
A watch list you set up on your web platform will also display on a mobile app
GainsKeeper, a capital gains monitor, is free to use
A glut of features across multiple platforms can make it hard to find the tools you want
Complex options (more than two legs) cannot be traded on the web platform
Futures and forex cannot be traded on the web platform
- Account Minimum: $0
- Fees: Free stock, ETF and options trading commissions in the U.S., as of October 7th, 2019. $0.65 per options contract.
Schwab's ETF screener on their website has 9 pre-defined screens, or you can build your own with up to 70 different criteria, including performance, sector, risk measures, and portfolio contents.
There are three web-based sites available: the standard at schwab.com, plus Trade Source, which helps customers generate trading ideas, and StreetSmart Central, which includes advanced options analytics and a live news feed from CNBC. Trade Source’s Strategy Screener lets you choose plain English screens, such as, “Which stocks have been up or down on a higher than normal percentage of the market’s total volume?” Technical analysis from Recognia fuels the screener.
Risk analytics built by optionsXpress, a brokerage Schwab acquired
All-in-One Trade Ticket lets you build a trade for any asset class you are eligible to utilize
The Idea Hub lets you look for trading ideas based on market moves and upcoming earnings announcements
There are three web platforms, and you may find yourself switching among them to use all the tools you need
The charting functionality in StreetSmart Central runs on Adobe Flash, which causes problems with some operating systems
- Account Minimum: $0
- Fees: $0 for stock/ETF trades, $0 plus $0.65/contract for options trade
Fidelity features one of the best trade-routing engines, which results in lower trade costs for their customers. The goal of their trading technology is to achieve price improvement on customer orders, so that “Buy” orders are executed at a price lower than the market at the moment the trade is placed, and “Sell” orders execute at a higher price. Customers trading quantities over 500 shares can often achieve more price improvement. Fidelity’s portfolio analysis feature lets you link outside accounts, as well as any cryptocurrency you hold at Coinbase, to give you a picture of your overall financial health.
Education offerings and tax planning are well-integrated, and the site itself is simple to navigate. Their recently redesigned trade ticket reduces the number of clicks needed to place a trade. Fidelity offers a more complex trading site called Trade Armor for those who want to design an exit plan when opening a new position.
The website features screeners for stocks, exchange-traded funds (ETFs), mutual funds, and a variety of fixed income products.
Excellent education and research
Screeners include social responsibility, and themes such as 3-D printing, artificial intelligence, and more
Banking services offered, including a 2% cash-back credit card and ATM fee rebates
For options traders, a trade ticket has been integrated into the options chain view
Portfolio analysis helps customers understand their exposure to sectors, industries, and geographical regions
Website performed erratically during trading surges in the last year
No futures trading available
Guest access available for 30 days; must deposit funds to maintain access to research, quotes, etc.
Some features are hard to find due to the deep menu structure of the website
- Account Minimum: $0
- Fees: No commission for stock/ETF trades. Options are $0.50-$0.65 per contract, depending on trading volume.
E*TRADE’s standard web platform includes streaming real-time quotes, news, charts, and daily market commentary. You’ll find screeners to help you choose stocks, ETFs, mutual funds, and bonds based on your criteria. Those new to investing can put together customized courses to learn more about selecting and placing trades, and also attend webinars and live events to step up to more complex strategies.
Options traders can use screeners and optimizers built by professional market makers on the OptionsHouse platform. Advanced traders can analyze and trade options on futures around the clock.
The OptionsHouse platform includes videos and calculators to help you learn how to trade options
The Technical Insights feature on the OptionsHouse platform teaches the new technical analyst how to use these studies
Good tools and flat pricing for bond traders ($1 per bond)
You may need to switch back and forth between the E*TRADE website and the OptionsHouse platform to take advantage of all the available tools
No forex or international trading available
- Account Minimums: $0
- Fees: $2.95 per stock trade. Options trades $2.95 per leg plus $0.75 per contract. Bank of America loyalty program members incur no trade fees
Merrill’s website offers a lot of help for setting and attaining financial goals. The Personal Retirement Calculator helps you estimate how much you’ll need to retire, and then builds an action plan to assist with your wealth building. The Portfolio Story feature spells out how your assets are allocated by sector and class, and helps you pinpoint underperforming investments to generate higher returns.
The research features summarize analysts’ opinions of your holdings. You can also check out the Environmental, Social and Governance (ESG) scores to see how your investments align with your personal values. The advanced web platform, Merrill Edge MarketPro, features streaming quotes and news along with interactive charting. The MarketPro dashboard is customizable, allowing you to rearrange the tools to suit your needs.
Lots of help for planning for goals and assessing your progress
Life stage planning gives you specific guidance for your current situation
Extensively integrated with parent Bank of America
Those with high balances with Merrill and/or Bank of America can qualify for commission-free stock and ETF trading
MarketPro access requires either a high balance or frequent trading activity
Frequent prodding to move assets into a managed account, which can cost more
No commission-free ETFs available unless you have a high account balance
The waived commissions for premium members cannot be used for options trades
Where Can I Learn to Trade?
While learning to trade and invest in the stock market may seem intimidating, it is actually more simple than you would think. Fortunately, Investopedia has a wealth of information that can teach you the ins and outs of the markets. The following articles are great resources to get you on your way to being a successful investor:
Trading Terms to Know
To trade successfully, you should have an understanding of certain terms. Every new investor should become acquainted with the following terms:
- Stock: A stock (also known as "shares" or "equity") is a type of security that signifies proportionate ownership in the issuing corporation. This entitles the stockholder to that proportion of the corporation's assets and earnings.
- Price-to-Earnings Ratio – P/E Ratio: The price-to-earnings ratio (P/E ratio) is a ratio for valuing a company that measures its current share price relative to its per-share earnings (EPS). The price-to-earnings ratio is also sometimes known as the price multiple or the earnings multiple.
- Market Capitalization: Market capitalization, commonly referred to as "market cap," refers to the total dollar market value of a company's outstanding shares. Market cap is calculated by multiplying a company's shares outstanding by the current market price of one share.
- Dividend: A dividend is the distribution of reward from a portion of the company's earnings and is paid to a class of its shareholders.
- Exchange-Traded Fund (ETF): An exchange-traded fund (ETF) is a collection of securities—such as stocks—that typically tracks an underlying index.
- Bond: A bond is a fixed income instrument that represents a loan made by an investor to a borrower (typically corporate or governmental). A bond could be thought of as an I.O.U. between the lender and borrower that includes the details of the loan and its payments.
- Mutual Fund: A mutual fund is a type of financial vehicle made up of a pool of money collected from many investors to invest in securities such as stocks, bonds, money market instruments, and other assets. Mutual funds are operated by professional money managers, who allocate the fund's assets and attempt to produce capital gains or income for the fund's investors.
- Limit Order: A limit order is the use of a pre-specified price to buy or sell a security. For example, if a trader is looking to buy XYZ’s stock but has a limit of $14.50, they will only buy the stock at a price of $14.50 or lower. If the trader is looking to sell shares of XYZ’s stock with a $14.50 limit, the trader will not sell any shares until the price is $14.50 or higher.
- Market Order: A market order is a request by an investor – usually made through a broker – to buy or sell a security at the best available price in the current market. It is widely considered the fastest and most reliable way to enter or exit a trade and provides the most likely method of getting in or out of a trade quickly. For many large-cap liquid stocks, market orders fill nearly instantaneously.
If you're interested in learning more about the stock market or related terms you can check out our guide to investing.
Things to Consider When Choosing an Online Broker
Once you have learned the basics of the stock market you can begin to think about choosing a broker. When choosing an online broker you'll need to consider these three important steps:
- Choose the type of brokerage account you need.
- Consider the features you want and their associated costs.
- Choose the brokerage that best fits your needs.
Step 1: In order to decide which broker works best for your needs, you first need to think about the different investing styles. Here are common investing styles used today:
You can check out exactly how these different methods work with our article on investment styles.
Step 2: It's very important to decide which features you will need in a broker. You should consider factors like educational materials, research tools, news access, and how their fees are structured to assess what works best for you. If you are beginner it could be best to focus less on their fees and more on what kinds of educational materials they offer. On the other hand, more experienced investors may want advanced charting features and the ability to back-test.
Step 3: Now that you have thought about which investment styles and features are suitable for you it's time to choose a broker. It's also important to keep in mind that fewer fees and commissions can also mean fewer features so it's best to research each platform before opening an account. Check out our guide to opening an online brokerage account for more guidance and information.
Investopedia is dedicated to providing investors with unbiased, comprehensive reviews and ratings of online brokers. Our reviews are the result of six months of evaluating all aspects of an online broker’s platform, including the user experience, the quality of trade executions, the products available on their platforms, costs and fees, security, the mobile experience and customer service. We established a rating scale based on our criteria, collecting over 3,000 data points that we weighed into our star scoring system.
In addition, every broker we surveyed was required to fill out a 320-point survey about all aspects of their platform that we used in our testing. Many of the online brokers we evaluated provided us with in-person demonstrations of their platforms at our offices.
Our team of industry experts, led by Theresa W. Carey, conducted our reviews and developed this best-in-industry methodology for ranking online investing platforms for users at all levels. Click here to read our full methodology.